What are the Types of Long-Term Care Policies Available Today?
There are four main types of long-term care policies that can help you prepare for long-term care. Which type is right for you? The answer to that question probably depends upon who you ask. If you’re talking to an insurance agent, they’ll probably say, “long-term care insurance is the best”. If you’re talking to an investment adviser, they’ll probably say, “asset-based life insurance is the best”. If you’re talking to an annuity salesperson, they’ll probably say, “an annuity is best”.
To help you, we’ve designed a simple tool that instantly and objectively points you to the type of policy that is right for you. Just answer a few simple questions. No phone is required.
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What are the 4 Types of Long-Term Care Policies:
“Traditional Long-Term Care Insurance”
Traditional Long-Term Care Insurance policies have changed significantly in the past 10 years. Today’s policies now provide rich benefits for care at home, federal standards for benefit qualifications, and larger benefit amounts including policies with no lifetime cap (i.e. unlimited benefit period). Since many of the older policies had large rate increases, 41 states have passed strict pricing regulations to protect those who purchase newer long-term care policies.
“Long-Term Care Partnership Program”
We’re often asked: “What if my long-term care policy runs out of benefits?” The “Long-Term Care Partnership Programs” solve that problem. These programs have created special, government-approved policies that protect your assets from Medicaid even if your policy runs out of benefits. These policies can be very affordable because you only need to buy a benefit amount equal to the amount of assets you want to protect from Medicaid.
“Hybrid Policy #1: Life Insurance Linked with Long-Term Care”
“Linked-benefit life insurance” policies combine life insurance and long-term care insurance. These policies usually have guaranteed level premiums. If you never need long-term care these policies pay a death benefit to your beneficiary. There are some excellent hybrids. Click here to find out what features are included in the best hybrids. There are also some terrible hybrids. Click here to be aware of the warning signs of a terrible hybrid. If you’re healthy enough to qualify for traditional long-term care insurance, here are five reasons why traditional long-term care insurance may be better for you than a hybrid.
“Hybrid Policy #2: Annuity Linked with Long-Term Care”
Annuities with long-term care riders are the least-known “hybrid”. These annuities are not good investments, but they can provide a hedge around your assets to help protect against the high cost of a very long period of care. When inflation protection is included, these annuities can pay long-term care expenses totaling five to eight times your single-premium deposit.